Wedbush Starts CarMax (KMX) at Neutral, Used Unit Comps Seen Slowing
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Price: $69.22 --0%
Rating Summary:
17 Buy, 14 Hold, 3 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 15 | Down: 17 | New: 4
Rating Summary:
17 Buy, 14 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 15 | Down: 17 | New: 4
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Wedbush initiated coverage on CarMax (NYSE: KMX) with a Neutral rating and a price target of $46.00. Analyst Seth Basham expects used unit comps to slow.
"CarMax's consumer-friendly no-haggle used car retailing model is the industry's best, in our view. We see potential for at least a doubling of the store base as the company expands through the U.S. Moreover, we believe that CEO Tom Folliard has proven his ability to execute this rollout and adapt to changing market conditions. However, we expect used unit comps to sharply slow in 2014 to +4% from +13% in 2013E as the benefits from rapidly improving credit availability fade, making this a less than ideal time to invest in KMX shares," said Seth.
"No, we are not calling for the credit meltdown of 2008, but we see credit expansion slowing markedly, if not contracting. Given the fact that CarMax’s sales are highly correlated to credit availability, and sales are the most important driver of stock performance, we await a better entry point," he added.
For an analyst ratings summary and ratings history on CarMax click here. For more ratings news on CarMax click here.
Shares of CarMax closed at $46.80 yesterday.
"CarMax's consumer-friendly no-haggle used car retailing model is the industry's best, in our view. We see potential for at least a doubling of the store base as the company expands through the U.S. Moreover, we believe that CEO Tom Folliard has proven his ability to execute this rollout and adapt to changing market conditions. However, we expect used unit comps to sharply slow in 2014 to +4% from +13% in 2013E as the benefits from rapidly improving credit availability fade, making this a less than ideal time to invest in KMX shares," said Seth.
"No, we are not calling for the credit meltdown of 2008, but we see credit expansion slowing markedly, if not contracting. Given the fact that CarMax’s sales are highly correlated to credit availability, and sales are the most important driver of stock performance, we await a better entry point," he added.
For an analyst ratings summary and ratings history on CarMax click here. For more ratings news on CarMax click here.
Shares of CarMax closed at $46.80 yesterday.
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